Tuesday, July 29, 2008

Frequent Flyer Programs and Credit Cards for Infrequent Flyers

Given the fact that we don’t have to travel for business, combined with the awful experience that air travel is today, we’ve begun planning more driving vacations and cutting back on our plans for discretionary flying. Until air misery improves, we expect to be flying only 3-4 times a year. So we got to thinking about other folks in similar situations or, especially, people who are new to the frequent-flyer and reward-credit-card games.

If you’re a newbie or just normally an infrequent flyer, you may want to re-think some of the commonly offered advice. Let’s examine 4 scenarios. (If you fly more than our examples, or already have a lot of miles, you’re probably OK with whatever you’re doing now.)

1 You fly once a year domestically to visit family or friends. You almost never stay in hotels.
2 You fly once a year domestically. You stay in hotels several times a year on your travels.
3 You fly once a year internationally for vacation, and another 1-2 times domestically. You almost never stay in hotels.
4 You fly once a year internationally and 1-2 times domestically. You stay in hotels several times a year.

Here are our suggestions.

Situation 1 & 2
Credit-Card Frequent Flyer Buying: We have two suggested options. Get a cash-back credit card (some offer as much as 3-5%, depending on category and spending limits – see some of our previous posts) and buy yourself an airline ticket with the money you saved. Alternately, look to the travel-reward cards outlined below. If you’re in scenario 2, seriously consider a hotel credit card instead. Assuming you like a particular hotel chain, your room rewards may work out to as much as 5% – far better than most cash-back or travel-reward card percentages. Some hotel cards also allow transfers to airline frequent-flyer programs. Some no-annual-fee hotel card options are listed below.
Flying: Sign up for the frequent-flyer program of whatever airline you fly, whenever you fly. Over time you may accrue enough flight miles for a ticket, if... you fly one airline as much as possible; your airline stays in business; the program doesn’t change the rules.

Situations 3 & 4
Credit-Card Frequent Flyer Buying: We’d still suggest a cash-back or travel-rewards card as your primary credit card. Hotel cards can again be very worthwhile if you’re in situation 4. You could also possibly – just possibly – consider a no-annual-fee airline credit card (as a secondary card only) if you fly one airline almost exclusively. The only major U.S. airlines that we know of which offer no-fee cards are United, USAir, and American. Still, you should get much better reward percentages with cash-back, travel-reward, or hotel cards.
Flying: Sign up for the frequent-flyer program of whatever airlines you fly. But... try to maximize your miles into one or, at most, two airline programs. Your travel patterns should show you which airlines are best for you. Then, take advantage of all the additional earning opportunities for your preferred airline program(s). These include contests, surveys, purchasing products through the airline’s shopping partners, car rentals, etc. Take at look at the many options shown on FreeFrequentFlyerMiles.com. Finally, and although this can get complicated for newbies, research the international airline partners of your preferred airline. For example, if your annual international trip is to Europe, look into the possibility of crediting all your flying miles to bmi rather than United, or to British Airways instead of American.

Specific Credit Card Advice for Infrequent Flyers

Avoid any reward card that charges an annual fee. Avoid the airline credit cards (except as noted above). Once you chose a card, stick with it – if you jump around between cards you’ll have less chance to build a large-enough point balance for redemptions. Never carry a balance on a reward card – most reward cards carry significantly higher APRs than non-reward cards.

Some folks appreciate the incentive of a travel-rewards card, feeling they’re getting more of a “free” ticket than simply using cash saved from other rebate cards. If you decide to go with a travel-rewards card instead of a cash-back card, there are two common types of point-based cards (with some variations).

One type allows you to earn points (fake miles) that can be used as a statement credit against any travel purchase. This category includes American Express FreedomPass and Blue Sky cards, Miles by Discover, and Capital One No Hassle Miles cards. Our favorite of this group is the Amex FreedomPass card, giving you 1.33% credit for travel purchases ($100 statement credit for 7,500 points). We like it because the FreedomPass card also offers some worthwhile travel discounts (for example: 3% off Delta or JetBlue tickets just by purchasing with the card).

The second category consists of cards where you need to contact the card issuer’s travel department to redeem your points (miles). This category includes the Merrill+ card, several Citi cards (ThankYou network), and Bank of America WorldPoints cards. These can be useful for acquiring that basic economy ticket within the U.S. Our favorite in this group is the Merrill card, giving you up to 2% value (a ticket up to $500 value for 25,000 points) as well as some other travel benefits, such as discounts on American Airlines tickets.

For hotel cards, some of the no-annual-fee offerings we’ve discovered include Hilton, Wyndham, Choice, La Quinta, and Best Western. We’ve personally been very pleased with Hilton’s Amex and Visa cards (the Amex card offers a little better point-earning rate). Look carefully at room rates and calculate your rewards percentage before getting a hotel card in preference to a cash-back or travel-rewards card.

Make every purchase count for something.

Saturday, July 26, 2008

Garmin Nuvi 670 GPS Review

We’d been planning for awhile to acquire a car GPS, and after looking at the options and online reviews, we settled on the Garmin Nuvi 670. We were familiar with Garmin’s hand-held GPS units from wilderness search-and-rescue work, but this is a different beast. We’d also used GPS a few times in rental cars, and found them reasonably convenient but not essential. But we’ll be driving all over the back roads of Scotland for a month, and thought a GPS would be helpful. So we got this unit in advance, to see how it worked on road trips in areas we’re familiar with and ones we’re not.

The unit has an excellent four-inch-wide touch screen, and is easily viewed from both driver’s and passenger seats. The 670 comes preloaded with both North America and Europe maps – if you’re planning on using a Garmin in Europe, it’s much more affordable to purchase one with the Europe maps now rather than spending several hundred dollars to add them later.

Our favorite aspects:
The unit was great for finding gas stations (or restaurants, or...) in medium-sized towns, where you could aimlessly wander one small street after another. The gas-find aspect is also great while on the highway to find out whether you should stop immediately or wait a few exits. (Or if the gas station that the highway sign says if off Exit 10 is really there, or 5 miles down a back road to a small town.)
We also liked that it showed some shops, lodging, and attractions. On our California wine trip, we often didn’t know the physical address of a particular winery, but the GPS listed just about every one by name in its directory.
In general, the unit took us right to our destination along the shortest or quickest route. We seldom second guessed a routing, even in regions we knew well. The menus and screens are very intuitive, and the voice software usually pronounced names well enough to be understood.

Our significant complaints:
If you get off route (because you drove past your turn, or took an intentional detour) the unit never just tells you to turn around. It’s always trying to find a new route, even if that means going miles to the next right-right-left to get you back on your original route.
At least one town (it’s been there since 1900, so it isn’t someplace new) simply didn’t exist in the database. Nor did any of the town’s street names show up in surrounding towns. Oddly, the street names actually show on the moving map itself. The unit just said “not found” for the name of the town itself and all its street names.
It sometimes calls roads “Highway 78” and then sometimes calls the same road “Taylor Avenue” or some such. Maybe Taylor Ave. is the local name, but we really don’t want to keep hearing “drive 34 miles on Taylor Ave.”
We know roads change, but a major highway bypass that was completed at least five years ago didn’t show on one of our routes. (Our unit had up-to-date maps, and the GPS manufacturers suggest buying updates every year. Still, a change in a major highway five years ago?)

Overall, we were pleased. The unit is quite intuitive in inputting addresses, and most maps seem up-to-date. But we would suggest never following the unit blindly, nor travelling without a paper map for backup of any questionable routings. Still, we’re taking it to Scotland, and plan on using it extensively.

Wednesday, July 23, 2008

Amazon – Another Good Cash-Back/Travel Credit Card

If you spend a lot at Amazon (as we do), you might consider the Amazon Visa card, which offers 3 “points” per $1 spent at Amazon. This works out to 3% cash back or an Amazon credit. You can also use “15,000 points [for] $150 off [an] Airline Ticket” and “25,000 Points [for a] Round-Trip Airline Ticket Within the 48 Contiguous United States.” We can not yet find if this requires purchase through a travel-agent partner, but it should still represent at least 3% (or better, if the price limit on the round-trip ticket offer is higher than $250). This is far better than what we consider our return (2%) on an airline credit card. There is also the option of converting “6,000 Points [in] Exchange for 5,000 British Airways Miles.”

With the card, you also get a $30 credit for your first purchase with the card, and double reward points for the first 90 days. Purchases at “Gas Stations, Restaurants, and Drugstores” offer the equivalent of 2%, and it’s 1% everywhere else you use the card. (We think you can do better than that with other cards.) There are other rewards available, and there is no annual fee.

Monday, July 21, 2008

Tip: Call the International Flights Phone Number

Most of the major U.S. airlines that fly internationally have separate reservation/customer service phone numbers for international travel vs. all-U.S. routings. Every time we’ve called the number for international flight assistance, we’ve been connected to a call center in the U.S. Conversely, when we’re using the phone number for booking or changing a U.S. reservation, we end up talking to someone in Asia. This is not a bad thing, but we’ve found we can generally get more personalized assistance with a customer-service rep headquartered in the U.S. Thus, we always call the international flights number, and just “forget” which number we’re calling, or say something like, “sorry, I meant to push 1 instead of 2.” No one has refused to assist us. Bottom line, especially if you have a complicated situation, call the phone number for international itineraries, no matter what your actual destinations.

Sunday, July 20, 2008

A Wall St. Journal Take on the Airlines' "Oil Speculators" Letter

We frequently disagree with the Wall St. Journal’s political stance, and editorial board member Kimberley Strassel’s columns often rub us the wrong way. But she has written the best response we’ve yet seen to the airlines’ letter to customers about oil speculators. Now if only a few of the airline CEOs made it far enough in school to be able to read....

Friday, July 18, 2008

IcelandAir MasterCard

We have found that a few places in Europe take MasterCard but not Visa. (We think that’s probably because those places take Maestro, MasterCard’s debit card.)

If you’ve been looking for a no-annual-fee MasterCard for international travel that charges less than the standard 3% rip-off foreign-exchange fee, take a look at the IcelandAir MasterCard from Juniper (Barclays). The card offers 5,000 initial IcelandAir points (miles) and 1 point per $2 of spending. The forex fee is a slightly better 2%. (There is also an annual-fee card available offering better mileage.)

No, that’s not as good as Capital One’s 0% forex fees, but Capital One has only one MasterCard in their line, which carries a $39 annual fee. All their no-annual-fee cards are Visas. (American Express charges 2% but is less widely accepted overseas. Discover charges 0% but is not accepted in Europe. The JCB card charges 1% but isn’t widely available to U.S. residents.)

If you’re interested in IcelandAir’s credit card, make sure you first sign up for an IcelandAir frequent flyer account through their current contest (ends July 29) – 120,000 points are up for grabs in the contest, with a 1,000-point sign-up bonus for new frequent-flyer program members.

Ahh. That sure tastes 3 percent better. (Vienna Woods, Austria)

Monday, July 14, 2008

Questionable Recommendations About Reward Credit Cards

Although many people consider Consumer Reports the final word about everything consumer-quality related – autos, sports equipment, financial services, clothes, appliances, etc. – we’ve never been impressed. In our observations, for product categories that we actually know about really well, Consumer Reports just about always misses the boat. It seems that CR assigns values to aspects of a certain category of product that really aren’t important, and then has non-experts write/research the articles. We’ve seen it over and over in various categories, which makes us skeptical of their reporting in other categories.

This all is leading up to the recent CR story about reward credit cards (“The Best Cash-Back Credit Cards”). There is a bit of solid advice in the article, but then they throw in something like this:

“‘Invariably, if you see a 5 percent card, there will be restrictions or other strings attached,’ [Curtis] Arnold [founder of U.S. Citizens for Fair Credit Card Terms] says. He points to Discover’s Open Road Card as an example. The card pays 5 percent cash back on gas and auto maintenance, but the fine print says that applies only to the first $1,200 you spend in the category. Another example is the Discover More Card, which also pays 5 percent on purchases in certain designated categories, but they change four times a year. ... But the right card can pay off handsomely. Arnold says he and his wife use American Express’s Blue Cash card, which, after you charge $6,500, pays 5 percent back on further purchases the rest of the year in supermarkets, drugstores, and gas stations, and 1.5 percent on everything else, with no limit on the reward amount.”

So CR is saying to avoid the card that doesn’t pay more than a certain amount (Discover), but use a card (Amex Blue) which doesn’t pay until a certain amount? And both have the “5%-strings-attached” feature. Huh?

The article then presents CR’s favorites, saying: “We screened out cards that charge an annual fee and selected among only those that rated five stars in Cardratings.com scoring...” We also dislike annual fees, as they effectively reduce your reward percentage, but for many users an annual-fee card can offer many worthwhile additional benefits.

But our biggest complaint is that the Consumer Reports recommendations are based on reviews from the cardratings.com website (which, by gosh, is the website of Arnold’s U.S. Citizens for Fair Credit Card Terms). Cardratings.com is an affiliate-marketing website first and foremost (in that every click to a card company’s application earns cardratings a commission) and an unbiased review site a far-distant second. For example, on the first page of cardratings “Featured Frequent Flyer & Travel Reward Credit Cards” section, one-third (3 of 9) of the cards are Capital One No Hassle cards. Most knowledgeable observers of the travel/reward-card world think Capital One cards have some of the poorest reward programs going. (In fairness, we actually like the card for its 0% foreign-exchange fees, but as a reward system it’s way down in the pack.)

We wholly agree with CR that no one should even consider a reward card if they carry a balance – just go for the lowest interest rate. But for those who pay off their cards every month, there are many superior cards to the eight best on Consumer Reports’ list, which includes two Discover cards (which they seemed to slam earlier in their article) and a 1% cash-back Capital One card (if you can’t get better than 1%, you’re not even trying).

The CR article is now making the media rounds, with CNN Money doing their article about the CR article in their “Raw Deal: Tales of Economic Injustice” section. The title of the CNN Money article about the CR piece? “Credit Card Rewards Are A Real Rip Off.”

That kind of reporting gives us a headache. We don’t know which bothers us most: CNN Money misrepresenting the CR article with an inaccurate and inflammatory headline, or the original CR article and its questionable recommendations.

Saturday, July 12, 2008

So is it Frequent Flyer or Frequent Flier?

This silly digression probably took us more research time than anything else we’ve written in the last several months. (And if that isn’t a sad commentary on the quality of our journalism for those other articles, we don’t know what is.) So, the question: Which is it, Frequent Flyer or Frequent Flier?

Two well-respected FF websites take opposing views. FrequentFlier.com and FreeFrequentFlyerMiles.com both have lots of good FF information. (The “Other-Spelling-of-FrequentFlier”.com goes to a shell website that is comprised of nothing but useless ads; please don’t visit it.) Various other travel writers come down on both sides of the question. Peter Greenberg likes flier; Gary Leff and Arthur Frommer (one new-school, one old) prefer flyer. ABC News recently used both spellings in one article.

So our first stop, of course, was that wise sage of the web. We did a Google search (this generation’s idea of quality research). Frequent flier returned 1,210,000 results, and frequent flyer 3,880,000. (Frequent flyer vs. frequent flier returned 135,000 results, yet none on the first 10 pages actually addressed this topic.)

Next, we went to airline websites. Surprisingly, many do not use either word, but use words like “program” or simply refer to their particular loyalty scheme (as our Brit friends say) by name: Mileage Plus, SkyMiles, OnePass, and many others (including the wonderfully creative Mileage Plan – guess the Alaska Airlines marketing department took that week off). In general, though, we found that most airlines used flyer.

Even the major Brit airlines – bmi and British Airways – side with flyer (we’d have thought it might be “flyour”).

Conversely, our old AP Stylebook (does anyone even know what that is anymore?) came down on the side of flier, saying: “Flier is the preferred term for an aviator or a handbill. Flyer is the proper name for some trains and buses.”

Another of those seldom-used writing tools – our dictionary – has the main entry under flier, and under flyer says: “same as flier.”

So take your pick. In general, I think we’ll stick with flyer in our writing, but see nothing wrong with either spelling. What we do see wrong is that the FF programs are becoming more like the American meaning of the Brit word scheme. In UK-speak, scheme does not have negative connotations, it just means plan or program. Yet regarding airline FF programs, we sometimes think they’re reading our dictionary (there we go again) definition 1b of scheme: “a secret or underhanded plan; plot.”

May all your frequent flyer/flier plans/schemes/programs continue to bring you happiness.

Thursday, July 10, 2008

Reward Credit Cards We Actually Use

We do a lot of credit-card juggling – using one card for some things and other cards for different categories of spending. Here is a rundown of where and why we use our various cards.

  • Chase Freedom Visa – We get 3% cash back (or points) for up to $600/month in spending in our 3 “Top” categories. This usually works out to groceries, gas, and cell-phone bills. We spend enough in those categories that we have both opened separate Chase Freedom accounts, letting us get the 3% on up to $1,200/month. (After $600 spending per month, the rate drops to 1%.)
  • Chase Business Visa – This gives us 3% at hardware/building supply stores, office supply, restaurants, and gas (plus a few other categories we don’t use it for).
  • Hilton American Express – This offers the equivalent (to our way of thinking) of approximately 3-5%, valued at hotel room rates. We use this at restaurants, drugstores, and the Post Office (all offering the higher point value, as do groceries and gas, but we use other cards for those purchases). It’s also our card for car rentals (as it provides primary CDW coverage, with an optional program), as well as being our preferred everyday card.
  • Hilton Visa – This gives fewer points than the Hilton Amex, but we use it as a Visa backup if an Amex card isn’t taken and our purchase isn’t in one of the gas/grocery/etc. categories above. We figure it at a 2-3% reward level.
  • American Express FreedomPass Business card – This gives us only 1.33% (as a statement credit which can be used for travel purchases), but we use it primarily for its 3% discount on Delta and JetBlue tickets (just by purchasing with the card), 5% at Hertz, and a few others. It, too, can be used for primary CDW car-rental insurance coverage. (See our previous article.)
  • Capital One Visa – Yes, the points are lousy (1.25% or less) but it charges no foreign-exchange fees. We use this pretty much just overseas. You can now convert points to cash at 1%, so you don’t have to be locked into a travel purchase with their weird point scheme.
  • JCB card – This is new for us, and we’re still exploring its use. It only charges 1% foreign-exchange fees, but offers 1% cash back. It’s our second/backup international credit card.
  • Airline cards – We still have United, American, and USAir no-annual-fee credit cards. They only offer 1-mile-per-dollar (which – depending on ticket price or using miles for upgrades – can sometimes work out to 2% or more) when purchasing tickets on the respective airline. For some reason, we feel that maybe, just maybe, if we get in a jam we might get a little better treatment if we purchased the airline’s ticket with their credit card. Especially for cheap fares, we think the loss of “better” points from using our Hilton Amex might be worth the tradeoff.

Finally, a side note. A couple of our cards are “Signature” Visas, supposedly offering some value-added benefits (lost-luggage reimbursement, some shopping benefits), but we just can’t see enough value in them to use the Signature cards in place of other cards, unless they also have good rewards schemes.

So that’s it. A lot of cards to juggle, but we do everything we can to maximize our rewards for the spending we’re going to do anyway. This may not be the best for you, but we wanted to share our little card insanity.

Tuesday, July 08, 2008

Airline Pricing Idiocy: A Model for Other Businesses?

Two travel news sources we regularly read, Joe Sharkey At Large and Aviation Insight & Perspectives, are frequently railing against the “follow-the-herd-without-the-real-facts” media and/or academic reports about the travel industry that are usually written by folks with little or no (it often seems) travel or business experience.

In the July 7, 2008 Wall St. Journal is an article titled “What E-Tailers Can Learn From Airline Pricing.” The short answer should be a resounding “Nothing,” but the five (yes, five) academic authors suggest internet retailers adopt demand-management pricing strategies.

We’ve done marketing and business consulting for a variety of businesses both large and small, and can’t imagine giving a client advice to adopt the worst pricing/business model we’ve ever encountered – the airlines’ model.

We know travel a little, we know airline operations even less, and we know marketing and customer behavior pretty well. That said, everything we ever encounter (from a consumer’s standpoint) about airline pricing boils down to this: The airlines are saying to us, 1) our product (an airline ticket) has so little real value that we can jack around with the price until you can’t see straight; 2) we’re doing everything we can to game our pricing, so you, Mr. & Mrs. Consumer, might as well try to game us right back; 3) we think we’re building your customer loyalty with “elite” levels and frequent-flyer miles, while actually we’re devaluing our own currency and annoying our best customers in the process; 4) our business model is so flawed that even we don’t really know what anything costs, so we’ll pull prices out of the sand and hope for the best and see what works; 5) my competitor next door sells widgets for xx dollars, so even if we did try to differentiate ourselves with a better product, you, Mr. & Mrs. Consumer, aren’t smart enough to see the difference so we’ll price our product at xx dollars also, and then complain about losing money because we didn’t know how to run our business.

This just makes us tired and we want to jump in the car and drive somewhere, even with gas at $5 per gallon.

Saturday, July 05, 2008

U.S. Cell Phones for International Visitors

Since we frequently offer travel tips for international visitors, we thought we’d pass along this article on TravelTechTalk. It offers the best information we’ve ever seen about U.S. cell phone (mobile) pre-paid plans and phones.

Tuesday, July 01, 2008

Worst Airline Website Award

We’ve suggested before that you shouldn’t base your air travel plans solely on an airline’s frequent flyer program (unless you’re a true frequent flyer). Only you can decide what’s important – price, schedules, comfort, etc. Likewise, you probably shouldn’t base your choices solely on your web experience. But in today’s travel world, if you have trouble even booking your flights, you might decide to turn elsewhere. Thus, our very personal opinions of airline websites (mostly U.S., but including a couple of international carriers).

There is no competition for bad website – USAir wins hands down. The site is slow, glitchy, pages only half load, and it’s overall just dreadful. They only show selective code-share flights, and especially bad is the frequent flyer section (Dividend Miles). Delta comes in a close second, with frequent time-outs to its pages loading and other flaws. (Let’s hope if Delta and Northwest do merge, they adopt Northwest’s website, and not Delta’s.) Even bmi’s confusing site is better. If you can’t do it well (as do Alaska, American, United, for example) why bother doing it? Just try to redeem miles on the USAir website – fat chance. This all seems especially egregious in these days of extra booking fees for using phone agents, for redeeming awards, and other fees-upon-fees.

Of the airlines we’ve flown over the past couple of years (including American, United, Alaska, Kenya, Air France/KLM, British Airways, Delta, easyJet, Southwest, Continental, Northwest, USAir, Qantas) – and airline websites we’ve used (a lot more than just the airlines we’ve flown) – even the marginal British Airways and Delta sites don’t come close to the flaws of USAir’s. Do we sound frustrated?

We spent much of our career in marketing, stressing customer service in all aspects of a business. We started at the ad agency (Leland Oliver Co.) where Jay Chiat got his start (and where his shadow still loomed large). Customer service is the same as marketing – the only difference is that marketing is directed at new customers and customer service is directed to existing customers. In our view, USAir falls down in both aspects.

“I think technology advertising will have to stop addressing how products are made and concentrate more on what a product will do for the consumer.” – Jay Chiat